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For over a decade, the number of people buying and selling cryptocurrencies grew and grew. Tax revenues from the proceeds from the sale of those investments. Not so much. That may finally change, but not until next year.

When it comes to stocks and other traditional investments, investors know they need to pay capital gains taxes and keep track of them because every traditional brokerage firm must send a tax form called a 1099-B to its clients and the Internal Revenue Service. shows. customer gains and losses; The authorities will know if the taxpayer fails to report these earnings.

Crypto traders are equally legally required to pay taxes on their profits, but cryptocurrency exchanges have not been required to submit these forms and will not be required to do so until 2024. Without the forms, the IRS had no way of knowing what was what. that profit falls short of going to court or voluntarily reporting by the taxpayer.

The amount of uncollected revenue is difficult to calculate given the intentionally anonymous nature of cryptocurrency and the opacity of the IRS. But the Congressional Budget Office estimates that the new cryptocurrency exchange reporting requirement will result in $28 billion in tax revenue collected over the decade after it takes effect in 2024.

“It’s certainly going to be a huge amount of reporting, and probably an increase in revenue,” said Joseph Riley, a New York tax lawyer who has focused on cryptocurrency, because taxpayers “will know that a copy has been sent to the IRS.”



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